Pricing is one of the biggest levers for growth for any business. If it’s handled right, it helps you bring in new customers, keep them around, and increase revenue as you grow. But if it’s mishandled, you risk leaving money on the table or making it harder for customers to stick with you.

Pricing must evolve alongside your company, and this is especially true for subscription and software-as-a-service (SaaS) businesses. Your pricing should be flexible enough to attract new users, make upgrades feel natural, and support long-term growth. Below, we’ll explain what makes a pricing model scalable, common mistakes to avoid, and how to adjust pricing over time.

What’s in this article?

• What is a growth-oriented pricing model?
  
• How do businesses build a pricing model that grows with them?
  
• What common mistakes hinder pricing scalability?
  
• How do companies adjust pricing as they scale?
  
• How does Stripe help businesses scale their pricing models?
  

What is a growth-oriented pricing model?

A growth-oriented pricing model plays an active role in helping your business scale. The right pricing structure attracts new customers, keeps them engaged, and grows their spending over time. Pricing can be a fast way to grow your business. Unlike marketing—which takes time to work—or product development, which requires heavy investment, a pricing adjustment can increase revenue quickly. Even small tweaks can have an outsized impact since pricing impacts who signs up, how long they stay, and how much they spend in the long run.

Pricing should evolve by:

• Bringing in new customers with an easy way to get started

• Ensuring customers feel like they’re getting their money’s worth, which can help with retention

• Encouraging growth with clear, logical ways to upgrade

Fast-growing companies often expand because their existing customers naturally spend more over time. This happens when pricing makes sense at every stage: entry-level plans attract new users, and pricing scales with usage so that bigger customers pay more as they get more value.

How do businesses build a pricing model that grows with them?

The challenge for pricing models is balancing affordability with revenue optimization. Businesses need to offer enough flexibility to serve different types of customers while also creating a clear path for upgrades and additional revenue. Here’s how businesses can structure pricing to grow alongside them.

Tiered pricing

Many companies use tiered pricing (think “Basic, Pro, Enterprise”) to offer customers options based on their needs and budgets. A startup might only need the essentials, while a larger company might be willing to pay more for extra features, security, or support.

Tiered prices help businesses grow by:

• Making entry-level pricing accessible without capping potential revenue

• Providing upgrade paths, so customers can grow into higher plans

• Creating predictable revenue, since each tier has a set price

Each tier must deliver increasing value, so customers can clearly see why upgrading makes sense.

Usage-based pricing

Usage-based pricing can also help businesses scale. Measurements of usage could include pricing per user, per transaction, per application programming interface (API) call—anything that grows as the customer gets more value. This works especially well for SaaS and infrastructure businesses since revenue naturally increases as customers rely on the product more.

However, pure usage-based pricing can lead to unpredictable revenue, which can make forecasting difficult. Some companies take a hybrid approach by combining a base subscription fee with usage-based charges to keep pricing flexible while giving their business a reliable revenue floor.

Discounts and promotions

Discounts can help land customers, but businesses need to use them strategically. Examples include:

• Lower rates for annual billing to encourage up-front commitment

• Volume discounts for bigger customers to increase deal sizes

• Targeted discounts for certain groups, such as startups, nonprofits, and students

Over-discounting can backfire, because heavy discounts might condition customers to wait for sales and can make the full price seem inflated. Instead of cutting prices across the board, use discounts to drive specific behaviors—such as longer commitments or higher spending—without undermining your product’s perceived value.

What common mistakes hinder pricing scalability?

Pricing can fuel growth or hold it back. Some mistakes make it harder to scale, frustrate customers, or leave money on the table. Here are some of the pitfalls to avoid.

Pricing too low early on

Many startups begin with low pricing to win customers quickly or out of fear that people won’t pay more. But underpricing has long-term consequences. It can be hard to raise prices later without pushback from early customers, and it can attract customers who prioritize cost over value. It might also hurt your brand perception, because if your price is too low, larger customers might question your business’s credibility.

In B2B, buyers often aren’t as price-sensitive as you’d expect. They care about return on investment (ROI), reliability, and risk more than they do squeezing out the lowest price. If your pricing doesn’t match the value you deliver, you’re missing out on maximizing your revenue and creating unnecessary obstacles for future growth.

Making pricing too complicated

It’s a good idea to have a few different pricing tiers, but too many plans, add-ons, and custom configurations can lead to confusion and indecision. More choices don’t always lead to more conversions, and a complicated pricing model can overload your sales and support teams. Customers might struggle to understand which plan is right for them or why an upgrade is worth it. A handful of well-defined tiers with logical upgrade paths works better than an endless menu of options.

Not tying price to customer value

A 2021 study showed that only 39% of SaaS companies use value-based pricing, while most rely on guesswork or competitor comparisons. But pricing based on costs or competitor benchmarks instead of customer value can hurt your business. Underpricing can undervalue your product, while overpricing for the wrong features can drive away potential buyers. And misaligned pricing leads to churn. If customers don’t see ROI, they might not stick around.

Your pricing should scale with the value you provide. That means regularly revisiting your value proposition, customer needs, and willingness to pay. Pricing is a living strategy that needs to evolve as your product and market change.

How do companies adjust pricing as they scale?

As businesses grow—adding features, reaching new markets, or adapting to economic shifts—pricing must evolve, too. But changing prices can be tricky. Here’s how businesses can adjust it without pushing away customers.

Test before you commit

Guessing the “right” price is risky. Instead, you can A/B test different price points before rolling out changes broadly. You might:

• Offer different prices to different customer groups and measure conversion rates

• Test new pricing models (e.g., usage-based vs. flat rate) on a small segment before a full launch

• Experiment with packaging, such as seeing whether bundling certain features increases average spend

These data-driven strategies can prevent costly missteps. If a price increase doesn’t hurt sign-ups, it’s a green light to roll it out further. If customers push back, it’s better to know early rather than after losing revenue.

Raise prices thoughtfully

No customer likes a surprise price hike. An effective business strategy would be to phase in increases gradually and communicate clearly about the changes. Strategies might include:

• Keeping existing customers at their current rate for a set period

• Offering early upgrade incentives, such as letting customers switch to a new plan before prices go up

• Justifying the increase by emphasizing added value, such as new features, better support, or improved infrastructure

Giving customers options can help make price increases easier to accept. If people understand why a price is rising and what they’re getting in return, they’re more likely to stay on board.

Reward long-term commitments

To soften the impact of price changes and increase customer retention, many companies use incentives for long-term contracts. These can include:

• Multiyear agreements that lock in lower pricing

• Discounts for annual prepayment (e.g., pay for 12 months, get 1 month free)

• Loyalty perks such as extra support, exclusive features, or usage credits

Long-term contracts provide customers with stability in their costs, while the business secures predictable revenue. Many enterprise SaaS companies bake in small annual price increases (e.g., 5%) as a default but let customers avoid them by signing longer contracts.

How does Stripe help businesses scale their pricing models?

As businesses grow, pricing complexity grows with them. A simple subscription model might work early on. But over time, you might benefit from introducing usage-based pricing, volume discounts, or enterprise contracts—all of which can create more administrative work and technical challenges.

Stripe lets businesses access the infrastructure to test, refine, and automate pricing adjustments without making operations harder and more time-consuming. Here’s how Stripe can help.

Flexible pricing support

A scalable pricing model should evolve alongside a business. Stripe Billing is built to handle the following for businesses:

• Recurring subscriptions (e.g., flat rate, tiered, per seat)

• Usage-based or metered billing

• Hybrid models (e.g., base subscription and variable usage fees)

• Custom enterprise contracts

• One-time purchases and add-ons

This flexibility allows businesses to iterate on pricing models without major engineering overhauls. Companies can introduce new pricing tiers as customer needs change; experiment with usage-based pricing while maintaining a predictable revenue base; and adjust and test pricing structures in real time using the Stripe Dashboard and API.

Automated billing for all pricing structures

As businesses introduce more complicated structures, such as metered usage or graduated pricing, billing logic gets harder. With Stripe’s automated billing, businesses can:

• Automatically track and bill for customer usage

• Apply tiered rates, volume discounts, and prorated charges

• Dynamically generate invoices based on real-time usage data

This automation allows businesses to confidently experiment with pricing while Stripe handles the billing logistics in the background.

Real-time insights to optimize pricing

As companies scale, their customer base, competitive environment, and market dynamics evolve. Stripe provides real-time analytics that help businesses refine their pricing strategy based on actual customer behavior. The Stripe Dashboard and reporting tools provide visibility into:

• Recurring revenue and churn trends

• Customer lifetime value and retention patterns

• Usage data that signals when customers might be ready for an upgrade

These insights make it easier to:

• Spot patterns in customer behavior that might signal an opportunity for a new tier or revised pricing

• Forecast revenue growth based on actual customer usage and engagement

• Test pricing changes on a smaller cohort first before a broader rollout

Reliability as you scale

In order for a business to scale, it needs a billing system that can keep up. Stripe provides 99.999% uptime no matter how many payments and invoices you’re processing, functionality across multiple currencies, and easily configured pricing changes. It also offers enterprise-grade security and fraud prevention, in addition to built-in tax compliance.